The state of Maryland just passed legislation to place a tax on digital advertising in an attempt to raise around $250 million to resolve the budget gaps related to the COVID pandemic. However, this legislation caused some serious concerns in the digital advertising community as it created several complexities when it comes to the execution of the tax. In today’s episode, David & Reid dive into what this new legislation covers, how it affects the tech giants as well as small businesses, and what it means for marketers.
David and Reid dive into the conversation with a bit f background on the new law. They talk about the trends that influenced this legislation, the possibility of this law being adopted in other states, and what this means for small businesses in the advertising industry. Moving on, David & Reid review the key components of the legislation and how the tax brackets work in this new legislation. They also talk about the possibility of the impact of the tax being rolled down to small businesses and customers, despite the tax being imposed on tech giants.
The digital advertising industry is significantly complicated, with lots of middlemen involved in the process. And this tax adds more complexities to the already complex environment. David & Reid talk about how this may affect the industry, how it might specifically affect online listing platforms, the effect on businesses located in other states.
There are a few organizations that went to court with the intention of getting this legislation repealed as they view it as unfair legislation. Wrapping up the episode, David & Reid talk about what might happen in the courts and how marketers should be prepared for what’s coming.
[01:38] Big Tech & Tax – The motive behind this legislation, the possibility of widespread adoption, and what this means to relatively small businesses in advertising.
[05:52] The Legislation – Reid and David talk about the key aspects this legislation covers and how the tax brackets work in this new legislation.
[09:11] Affect on Small Businesses – How the impact of the tax on big tech may roll down to small businesses and their clientele.
[12:05] Middlemen – The digital advertising arena has a significant amount of middlemen in the chain. David talks about how this new tax process might get complicated when it comes to working with middlemen.
[15:13] Online Platforms – How the tax may affect platforms such as CoStar, apartments.com and how these companies may respond to the tax.
[20:00] Other States – How the Maryland tax legislation might affect advertising businesses in other states.
[25:54] Countermeasures – There are few organizations filing lawsuits to argue that this tax is unfair. David and Reid talk about what might happen in courts and how the advertising platforms may handle this until the legal disputes are resolved.